S&P may boost Mittal Steel

Standard & Poor's said it placed its BBB- long-term corporate credit ratings on Mittal Steel USA Inc. and its financial vehicle Ispat Inland LP on CreditWatch with positive implications. The placement follows the offer by the parent company, Mittal Steel Co. NV (now referred to as Arcelor-Mittal and rated BBB with stable outlook), of a full and unconditional guarantee on the U.S. operating subsidiary's $500 million bonds and the cessation of separate reporting at the subsidiary level.

The U.S. subsidiary currently is rated one notch below Arcelor-Mittal because its stand-alone credit quality has historically been weaker, the agency said.

The positive watch implications reflect S&P's opinion that, if and when the guarantee is issued, the senior unsecured creditors of the U.S. subsidiary will effectively face only the credit risk of the parent. In such a scenario, the agency said it would raise the rating on the U.S. subsidiary and its senior unsecured debt to BBB, to equal the parent. After the guarantee is issued, the agency said it does not expect the U.S. subsidiary to have any substantial debt not guaranteed by the parent.

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